DCIT, CC-2, Hyderabad V. G Radhacharan Reddy, Hyderabad

MA 119/HYD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2499 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 18-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V RAGHAVENDRA RAO
• Assessee Lawyers: P SOMASEKHAR REDDY
• Keywords: Capital asset; Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER M.A. NO.120/HYD/2014 (IN ITA NO.377/HYD/2013) : ASSESSMENT YEAR 2006 - 07 DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 2, HYDERABAD V/S. SMT. G.NIVEDITA REDDY HYDERABAD ( PAN - ADJPG 5941 N) (APPLICANT) (RESPONDENT) M.A. NO.119/HYD/2014 (IN ITA NO.374/HYD/2013) : ASSESSMENT YEAR 2006 - 07 DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 2, HYDERABAD V/S. SMT. G.RADHA CHARAN REDDY HYDERABAD ( PAN - ACAPG 3331 Q) (APPLICANT) (RESPONDENT) APPLICANT BY : S HRI V.RAGHAVENDRA RAO RESPONDENT BY : SHRI P.SOMA SEKHAR REDDY DATE OF HEARING 17 . 1 0.2014 DATE OF PRONOUNCEMENT 31.10.2014 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: BY THESE APPLICATIONS UNDER S.254( 2) OF THE INCOME TAX ACT,1961, THE REVENUE IS SEEKING RECTIFICATION/RECALL OF THE CONSOLIDATED ORDER OF THIS TRIBUNAL DATED 31.10.2013 IN SO FAR AS IT RELATED TO ITA NO.374/HYD/2013 OF SHRI G.RADHACHARAN REDDY FOR THE ASSESSMENT YEAR 2005 - 06 AND ITA NO.37 7/HYD/2013 OF SMT. G.NIVEDITA REDDY FOR THE ASSESSMENT YEAR 2006 - 07, ON THE GROUND THAT CERTAIN MISTAKES APPARENT FROM RECORD HAVE CREPT INTO THE SAME. MA NO. 119 & 120 /HYD/2014 (IN ITA NO.374 & 377 /HYD/20 13 ) SHRI G.RADHACHARAN REDDY & ANR, HYDERABAD 2 2. REITERATING THE AVERMENTS MADE IN THE PRESENT APPLICATIONS, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT DURING TH E COU R SE OF SEARCH ACTION AT THE PREMISES OF THE ASSESSEES, AN AGREEMENT REGISTERED ON 31.1.2006 ENTERED INTO BY THE ASSESSEE S WITH M/S. VNR CO N ST R U C TIONS FOR CON S TRUC T ION OF A BUIL D IN G IN R E SPECT O F THE PROPERTY AT H ASMATHPET WAS FOUND. AS THE ASSESSEE AND HER HUSBAND TOGETH E R ARE ENTITLED TO 40% OF THE CON S TRU C TED AREA, THE ASSESSING OFFICER HAS WORKED OUT THE LONG TERM CAPITAL GAIN S ON THIS T RANSACTION BY ADOPTING 40% OF COST ESTI M AT E D ( 91,10,00,000 X 40%) IN DEVELOPMENT AGREEMENT AS CONSIDERATION FOR TRANSFER OF THE LONG TERM CAPITAL ASSET I.E. RS.44,00,000 @ RS.367.52 SQ. FT (440000/11862 SFT). THUS, THE ASSESSING OFFICER DETERMINED THE LONG TERM CAPI T AL GAINS FOR BOTH HUSBAND AND WIFE AT RS.41,37,218 AS AGAINST THE COMBINED L ONG TERM CAPITAL GAINS OF RS.15,23,221 DECLARED IN THEIR RETURNS OF INCOME. ADDITIONS HAVE BEEN MADE ON THIS BASIS TO THE LONG TERM CAPITAL GAINS DIS CLOSED BY THE ASSESSEES IN THEIR RETURNS OF INCOME FOR THE RESPECTIVE YEARS UNDER CONSIDERATION. IT IS SUBMITTED THAT THOUGH THE TRIBUNAL HAS UPHELD THE ADDITION S MADE BY THE ASSESSING OFFICER ON THIS BASIS, ON ACCOUNT OF LONG TERM CAPITAL GAINS, WHILE D EALING WITH OTHER GROUNDS WITH REGARD TO SHO R T TERM CAPITAL GAINS ON SALE OF FLATS RECEIVED AS PER THE ABOVE MENTIONED DEVELOPMENT AGREEMENT, THE TRIBUNAL HAS DIRE C TED THE ASSESSING OFFICER TO ADOPT THE COST OF CON S TRU C TION AT R S .782 PER SFT BEIN G COST TO THE DEVELOPER, M/S. VMR CON S T R U C TION AND TO COMPUTE SHO R T TERM CAPITAL GAINS ACCORDINGLY VIDE P A RA 37 OF THE CONSOLIDATED O R DER DATED 31.10.2013. IT IS SUBMITTED THAT DIR EC TION TO ASSESSING OFFICER TO ADOPT COST OF CON S TRUC T ION AT RS.782/ - PER SFT. INSTEA D OF RS.367.52 ADOPTED BY THE ASSESSING OFFICER FOR THE PURPOSE OF WORKING OUT THE SHORT TERM CAPITAL GAINS WHICH HAS BEEN UPHELD BY THE TRIBUNAL, IS AN ERROR APPARENT FROM RECORD, CALLING FOR RECTIFICATION. MA NO. 119 & 120 /HYD/2014 (IN ITA NO.374 & 377 /HYD/20 13 ) SHRI G.RADHACHARAN REDDY & ANR, HYDERABAD 3 3. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND, STRONGLY SUPPORTING THE ORDER OF THE TRIBUNAL DATED 31.10.2013, SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD, SINCE THE TRIBUNAL HAS GIVEN CERTAIN DIRECTIONS AND MERELY DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE SHORT TERM CAPI TAL GAINS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE IMPUGNED THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE ORDER OF THIS TRIBUNAL DATED 31.10.2013 IN THE LIGHT OF THE AVERMENTS MADE IN THE PRESENT APPLICATIONS. THE TRIBUNAL, AS RIG HTLY CANVASSED BY THE LEARNED COUNSEL FOR THE ASSESSEE HAS GIVEN CERTAIN DIRECTIONS ON THE RATE TO BE ADOPTED FOR ARRIVING AT THE COST OF THE FLATS, FOR THE PURPOSE OF COMPUTING THE SHO R T TERM CAPITAL GAINS, AND R E STORED THE MATTER TO THE FILE O F THE ASSES SING OFFICER FOR COMPUTING THE SHORT TERM CAPITAL GAINS TO BE ASSESSED IN THE HANDS OF THE ASSESSEES WITH REGARDS TO THE SALE OF FLATS RECEIVED IN PURSUANCE OF THE DEVELOPMENT AGREEMENT. IT IS NO DOUBT TRUE THAT THE RATE DIRECTED TO BE ADOPTED BY THE ASSE SSING OFFICER FOR COMPUTATION OF SHORT TERM CAPITAL GAINS ON THE SALE OF FLATS RECEIVED IN PURSUANCE OF THE DEVELOPMENT AGREEMENT IS DIFFERENT FROM THE ONE ADOPTED BY THE ASSESSING OFFICER FOR COMPUTING THE LONG TERM CAPITAL GAINS, WHICH HAS BEEN UPHELD BY THE TRIBUNAL. THAT DIFFERENCE IN THE RATE DIRECTED TO BE ADOPTED FOR COMPUTING THE LONG TERM CAPITAL GAINS IN RESPECT OF FLATS RECEIVED IN PURSUANCE OF THE DEVELOPMENT AGREEMENT, AS COMPARED TO THE RATE ADOPTED BY THE ASSESSING OFFICER FOR COMPUTING THE L ONG TERM CAPITAL GAINS, WHICH HAS BEEN UPHELD BY THE TRIBUNAL, CANNOT BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD. WHEN THE TRIBUNAL HAS SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER, IT HAS LEFT THE MATTER TO BE WORKED OUT BY THE ASSESSIN G OFFICER, WHICH IS WITHIN ITS DISCRETION TO LEAVE THAT ASPECT OF THE MATTER TO BE DECIDED BY THE MA NO. 119 & 120 /HYD/2014 (IN ITA NO.374 & 377 /HYD/20 13 ) SHRI G.RADHACHARAN REDDY & ANR, HYDERABAD 4 ASSESSING OFFICER . IN SUCH A CIRCUMSTANCE, IT CANNOT BE SAID THAT THE TRIBUNAL SHOULD HAVE ITSELF DONE THAT EXERCISE OF COMPUTING THE SHORT TERM CAPITAL GAIN S. THERE IS NO MISTAKE APPARENT FROM RECORD POINTED OUT BY THE REVENUE THROUGH THESE APPLICATIONS AND A LL THAT THE REVENUE IS SEEKING BY THE PR E SEN T APPLICATIONS IS TO MERELY DISPUTE THE COURSE OF ACTION ADOPTED BY THE TRIBUNAL, AND THEREBY SEEKING A REV IEW OF OUR ORDER. SINCE SUCH A REVIEW IS NOT POSSIBLE IN THE SE PROCEEDINGS UNDER S.254(2) OF THE ACT, THE SCOPE OF WHICH IS CONFINED TO MERE RECTIFICATION OF MISTAKES APPARENT FROM RECORD. IN THIS VIEW OF THE MATTER, WE FIND THAT THE PRESENT APPLICATI ONS OF THE REVENUE ARE DEVOID OF MERIT, AND AS SUCH ARE LIABLE TO BE DISMISSED. WE DO SO ACCORDINGLY. 5. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATIONS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31 ST OCTO BER, 2014 SD/ - SD/ - ( P.M.JAGTAP ) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER D T/ - 3 1 ST OCTOBER , 2014 COPY FORWARDED TO: 1. 2. SHRI G.RADHA CHARAN REDDY, FLAT NO.102, ZAMRUDH RESIDENCY, RAJ BHAVAN ROAD, SMAJIGUDA, HYDERABAD SMT. G.NIVEDITA REDDY, FLAT NO.102, ZAMRUDH RESIDENCY, RAJ BHAVAN ROAD, SMAJIGUDA, HYDERABAD 3 . DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 2, HYDERABAD 4 . COMMISSIONER OF INCOME - TAX(APPEALS) - I HYDERABAD 5 COMMISSIONER OF INCOME - TAX CENTRAL HYDERABAD 6 . DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S MA NO. 119 & 120 /HYD/2014 (IN ITA NO.374 & 377 /HYD/20 13 ) SHRI G.RADHACHARAN REDDY & ANR, HYDERABAD 5